Cannell, of Cannell Capital, is demanding Rightside lay off one in five of its staff, dump its weakest new gTLDs, and refocus the company on its eNom registrar business.

He’s threatening to launch a proxy fight at the company in order to replace the Rightside board of directors with his own slate if management does not do what he wants.

Cannell’s letter called out .democrat, .dance, .army, .navy, and .airforce as “irrelevant” or “garbage” gTLDs in Rightside’s portfolio that should be sold or simply “abandoned” in order to focus on its better gTLDs, such as .news, and its cash-generating registrar business.

Schilling told DI tonight that he agrees with Cannell, at least partly.

He said that if Cannell’s proposal for the company is good for shareholders and the company he would support it.

It may sound counter-intuitive for Schilling, one of the most ardent proponents of new gTLDs, to support somebody encouraging Rightside to invest less in marketing its new gTLD portfolio.

After all, Uniregistry has a couple dozen new gTLDs — including .sexy, .christmas, .pics and .link — in its stable

But Schilling has form when it comes to advocating portfolio rationalization.

“Operators may make the decision to give away or sunset unprofitable strings,” he said in those comments. “I don’t view that as such a bad thing.”

Schilling said that weaker strings should be “bootstrapped” rather than aggressively invested in.

One of Cannell’s beefs with Rightside is that the company is focusing too much on new gTLDs. He’s not opposed to new gTLDs in general — in fact, he likes them — but he wants Rightside to put money only into those gTLDs he considers worthwhile.

Cannell also wants Name.com rebranded to eNom and moved to Rightside’s Seattle headquarters, for two of its directors to be replaced and for 20% of Rightside’s “weakest” staff to be laid off.

I asked Schilling whether he agreed with Cannell that that 20% of Rightside’s staff should be let go.

He said: “I do not think it is healthy to name arbitrary numbers but I do think some wrong people are in the wrong seats.”

Schilling also said that he believes Rightside has been “subservient” to Donuts, and has given Donuts too much for too little.

Donuts is the portfolio gTLD registry play that uses Rightside as its back-end registry provider.

Donuts has a much better portfolio, in my irrelevant opinion.

Another notable investor in Rightside is XYZ.com CEO Daniel Negari and his COO Michael Ambrose, who collectively invested roughly $8.5 million in Rightside at around the same time as Schilling and Cannell bought their stakes.

Like Schilling, they’re an obviously pro-new-gTLD play. I’ve asked Negari for his opinion on Cannell’s letter and will update should I ever receive a response.